Automating business decisions: Do you know the rules?

CIO talks to Peter Fuller, regional vice-president and managing director at Progress Software A/NZ, about the increasing need for organisations to automate key business rules.

What is business rules management?

It is taking business rules organisations have and managing them more effectively. Business has become more complex and as the global market has become more competitive, organisations have had to look at their business rules, how they affect internal process and decision making and how they transact with customers. They have started to realise they need to do things smarter if they are going to compete more effectively with other organisations in the marketplace.

Business rules vary by organisation. For example, if I was to apply for a mortgage with a financial services organisation, there are a number of rules that would apply and a number of questions that are asked. Based on my answers to those questions, data flows along pre-determined paths and those paths then come out with an answer, which tells the financial institution what my risk profile is, if I qualify for a loan and at what level of interest. This information is then put into a business rules engine, which automates the flow of those rules and delivers a rapid decision.

Why is automation and management of business rules important for organisations?

It comes back to complexity, competitiveness and the ability to change rapidly. We know organisations from a business and IT point of view are being forced to reduce budgets on an annual basis, to do more with less and become more efficient. Organisations that have a large reliance on automated business rules management can show significant financial improvements and increased customer satisfaction by automating their business rules.

As competition in the market changes, organisations need to be able to rapidly change their business rules. In the past, it has been very difficult to change - some organisations might take four or five months. In today’s economy you simply can’t afford to take that long.

What sort of organisations benefit from deploying a business rules engine?

The list is quite diverse and includes financial services, insurance, healthcare, ecommerce and website-based organisations, retail, and logistics companies. For instance, insurance companies use business rules engines for claims processing and underwriting, and logstics organisations can better manage transport routes. A large supermarket chain may use them for managing product pricing where a large number of rules change regularly.

Do you have examples of the types of problems solved by business rules engines like Progress Corticon?

Elm Resources, a not-for-profit organisation in the US, helps colleges and schools manage student loans much like our HECS system. Elm Resources has unique rules around the millions of transactions that take place every day between 1600 lenders and 1700 schools.

Using a business rules management engine, the company has been able to reduce the time it takes to set up a new customer (student) loan from 30 days to two days. It’s a huge improvement that has a positive impact on the business.

They cut application maintenance costs by 80 per cent and average loan processing time by 50 per cent, which ultimately increases customer satisfaction and the amount of business the organisation generates.

In Australia, one of the largest transport and logistics companies was struggling with labour-intensive, paper-based proof of delivery and quality control processes that were difficult to change. The company started using a business rules engine to automate the processing of 100,000 transactions per day and identify quality control issues based on 60 input variables.

As a result, quality control checks can be completed faster, customer service has improved, and staff are now engaged in activities that add value to the business.

What do you say to organisations who believe they don’t need separate business rules engines because they already have large ERP systems in place with similar integrated tools?

When it comes to specialist processes, you require a specialist product. Number one, the big ERP companies don’t necessarily specialise in business rules management, it’s a component that helps workflow but it’s not a specialist business rules management tool.

Number two, when it comes to implementation, the big ERP organisations are generally a lot more complex and expensive to deploy their business management tools. This is mainly because they need to integrate into a bigger environment and you are paying for SAP or Oracle resources at a relatively higher price.

Specialist or best-of-breed products are specifically built to do a particular job. They are also generally a lot more efficient, higher performance and easily scalable. Implementation is also very quick, it’s weeks rather than months.

What do you say to organisations who believe they don’t need separate business rules engines because they already have large ERP systems in place with similar integrated tools?

When it comes to specialist processes, you require a specialist product. Number one, the big ERP companies don’t necessarily specialise in business rules management, it’s a component that helps workflow but it’s not a specialist business rules management tool.

Number two, when it comes to implementation, the big ERP organisations are generally a lot more complex and expensive to deploy their business management tools. This is mainly because they need to integrate into a bigger environment and you are paying for SAP or Oracle resources at a relatively higher price.

Specialist or best-of-breed products are specifically built to do a particular job. They are also generally a lot more efficient, higher performance and easily scalable. Implementation is also very quick, it’s weeks rather than months.

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